Tag: john locke trades

Oct 20 – Trade Update

RUT is stagnant at the 1160-1165 area. We’re up 85 points from the low and I am in no huge rush to adjust on the upside unless the market tells me to by going above the 1170 area convincingly. I’ve added some 1190 call calendars to get some theta while we wait either way. The positions aren’t decaying quickly but time decay is not linear and usually comes in bunches. Not to mention, we’re not really under our tents for many of the trades. Ideally we have a nice pullback sometime soon. But in any case, with an extended up move, we’ll roll forward and do just fine.

Today, I also entered the December bearish butterfly trade with 2 units 1140 BF @ $9.63. I don’t think we have that much upside without some back tracing first. This trade should do well enough. I think the entry is decent. I think we end the year probably around 1200 area on the RUT. Nov/Dec are historically strong months and usually always there is a rally within that time period. This year feels a bit different with a lot of tail winds. Not that that opinion means much.

As for upcoming trades:

On Thursday I will enter more Dec M3 positions at 57 DTE and I’ll be entering a one unit 30 day rock position
On the following Thursday I’ll be entering Rhino positions for January at 77 DTE. That should conclude the trade entries for this month.

Rhino M3

    Sitting right at the edge of the tent. Not much to do now. Just waiting.

    Screen Shot 2015-10-20 at 2.32.22 PM

    Nov M3

      Outside the tent. Added some verticals and actually some Nov 1190 call calendars as an upside hedge to keep the theta strong. Waiting for a move in either direction. If we make any movement above 1170, I’ll roll the BFs forward.

      Screen Shot 2015-10-20 at 2.33.31 PM

      Dec M3

        Nothing going on with this one yet.

        Screen Shot 2015-10-20 at 2.34.47 PM

Oct 15 – An afternoon rally

What a run!

The RUT is at 1163 right now and rebounded 28 points from 1135 (almost a 2.4% move in a few hours). The large run from 1135 to 1161 this afternoon is shitty for the trades. We were comfortably under the tent and now we’re approaching the edges and most some of the paper profits will be wiped away. It will put pressure on the upside that we may have to address tomorrow. It could be another OEX top and theres a lot of Chinese data coming out Sunday. Ideally, I’d prefer to adjust Monday afternoon..and if we don’t break 1170 we should be able to get away without any adjustments tomorrow. We’re 36 days from our November expiry and we’ll be looking to close around 21 DTE (max 14 DTE). So I’ll be looking for a pullback in the next 20 days to close the trade. The hope is that the pullback is closer to the end of the trade.

Oct 15 (Trade Updates)

Nov M3

    Delta: -187
    Gamma: -3
    Theta: 752
    Vega: -2,200
    P/L: 5,654

    Units: 5
    Profit Target: 20,000Screen Shot 2015-10-15 at 12.05.43 PM

    Dec M3

Delta: -36
Gamma: -3
Theta: 270
Vega: -2070
P/L: 5,216

Units: 4 (2 calls 4 butterflies)
Profit Target: 15,000

Screen Shot 2015-10-15 at 12.06.38 PM

Dec M3 Rhino

    Delta: -159
    Gamma: -5
    Theta: 520
    Vega: -3200
    P/L: 9,810

    Units: 10
    Profit Target: 25,000

    Screen Shot 2015-10-15 at 12.04.46 PM

Oct 13 – Trade Update

    Nov M3 update

    No adjustments today. After sitting outside the tent for about 4 trading days, I reluctantly sold off the 1060 BFs yesterday only to have the market pull back about 17 points today :).

    Screen Shot 2015-10-13 at 3.25.07 PM

      Dec Rhino M3 Update

      No adjustments today.

      Screen Shot 2015-10-13 at 3.24.20 PM

        Dec M3 update

        No adjustments today.
        Screen Shot 2015-10-13 at 3.28.41 PM

          Dec Bearish Butterfly update

          Screen Shot 2015-10-13 at 3.29.33 PM

Oct 12 (Trade Plans)

Nov M3

    I closed the 1060 BFs

    Here is the position:

    Screen Shot 2015-10-12 at 2.30.23 PM

    Dec M3 Rhino

      No actions today.

      Here is the position:

      Screen Shot 2015-10-12 at 2.25.22 PM

      Dec M3

        No actions required

        Here is the position:

        Screen Shot 2015-10-12 at 2.55.58 PM

        Dec Bearish Butterfly

          Entered this on Friday. Rut was up 85 points and I peg the maximum upside to 1190 but more likely to stall at 1160 area.

          Screen Shot 2015-10-12 at 2.54.49 PM

Oct 8 (Rhino Trade)

The M3 Rhino called for an adjustment today but I wanted to wait until everything settled down re the Fed minutes. It’s a super resilient trade and its so far out, there is no rush in these types of adjustments (at all). As long as it gets done sometime soon.

Here is the trade as it stands at close.

Screen Shot 2015-10-08 at 5.41.56 PM

Here it is with the planned adjustment

Screen Shot 2015-10-08 at 5.43.27 PM

When delta gets to about delta -250 to -500 (depending on where we are in the risk profile.) we’ll start adding in call calendars. I can’t believe the RUT is up almost 80 points in like 3 trading days.

Brian Larson has a service over at Capital Discussions for anyone that wants trade alerts for this type of trade. It’s a good one. He’s just started and it’s free until January I believe.

Oct 8 (Oct M3 and Protector)

I am all out of the October M3 trades. That’s it. All out. I think we ended up neutral to yesterday. The next M3s will all be longer term with exits around 21 DTE. The planned capital will be lower and the profit target will be as well. Easier trades and they’ll be tracked here.

I am getting frustrated with the protector and am more and more tempted to just shut it down and take the loss. It’s riding around -5% for the year mostly to due with difficulties paying for the hedge and equity correlation issues. I’ll give it some more time probably.

Breaking it down, since the beginning of the year the alpha equities are down about 2.5% compared to SPY 3%. The gap was a lot wider before. The hedge is down about 2.5% as I’ve been whipsawed a little and fell behind in paying for it.

Oct 8 (Nov M3 Update)

The trade is still flat. It’s about 5 points outside the tent and I usually wait a day or two and for it to be about +10 outside the tent before rolling any BFs. We added put credit spreads yesterday to even out the delta and help with the Vega. If we get over 1158 by 3:30 EST today, I’ll add more and look to roll BFs tomorrow.

Again, this trade has been through a 7% down and a 7% up and its flat. That’s good. We’ve got about 20 days before we’ll close it and the idea is that it’ll fall within the tent at some point within the next 20 days and we can start looking at profits.

Screen Shot 2015-10-08 at 12.08.56 PM